Anchorage airport officials pursue expansion of cargo transfer capacity

Officials at Ted Stevens Anchorage International Airport are angling for help to maximize the benefits of the unique freedom from some trade laws the airport offers.

Anchorage is one of very few airports in the world where a foreign cargo can be transferred from one aircraft to another without being subject to customs and other trade requirements.

Anchorage Airport Manager Jim Szczesniak said cargo transfers are being done on a small scale and he believes part of the reason it hasn’t grown is there isn’t a good place for it. As a result, airport leaders are looking to help someone develop a large cargo transfer facility there.

“People aren’t going to come up here and leave a couple pallets of iPads sitting on the ramp waiting for another plane to show up,” Szczesniak said. “If they have a facility where they can take fish, fruits, electronics, engine machinery — high-value stuff — and securely store it out of the weather they can wait for that flight that goes (to the proper city) and get things there more directly.”

The airport is already the fifth-busiest cargo hub on Earth at a volume of roughly 2.8 million tons of freight per year, but that’s mostly due to its geography that makes it an advantageous refueling stop for cargo flights between Asia and the North America.

The Anchorage Economic Development Corp. estimates the airport generates 1 out of 10 jobs in the city.

Few cargo companies have regularly utilized the unusual but potentially significant opportunity — particularly given Anchorage’s geographic location — that in theory could make their operations more efficient.

For example, a foreign-flagged carrier could deliver cargo from Asia to Anchorage on a Boeing 747 and transfer it directly to smaller aircraft destined for multiple cities across the Lower 48. Additionally, domestic freight forwarders can purchase space on flights and act as the domestic carrier because they “own” the cargo.

Almost all of the dedicated cargo traffic headed to the Lower 48 through Anchorage is destined for another major cargo hub such as Chicago, New York City or Los Angeles. From there, the goods are sent out by land in a web of distribution networks.

The same options are available at the Fairbanks airport; however, Anchorage has more capacity to handle large aircraft.

Airport officials and general Alaska trade advocates have said the open shipping options have not attracted business in part because shippers are often skeptical they’re actually allowed; in most places such cargo transfer would be cabatoge, a federal crime.

Airport officials surveyed cargo carriers last fall to gauge the interest in a potential cargo transfer facility and the response was positive enough to investigate the idea further.

Szczesniak added that produce going from Latin America to Asia and e-commerce shipments have increased of late alongside the traditional cargo going from Asian manufacturing centers to North American consumers, so the facility could offer more than simple warehouse space if it is requested.

“We’re also trying to maximize the airport’s ability to process Alaskan goods. We’ve got high demand for live king crab, obviously salmon, and peony flowers are quite popular,” Szczesniak said.

He noted the project, likely in the tens of millions of dollars, could also be phased to best match demand from carriers or forwarder companies.

A large parcel on the northern part of the airport adjacent to FedEx’s hangar has been identified as the best location for the facility.

While the project would rely on a private developer, the state-owned airport would collect lease revenue; more cargo flights would also mean more landing and other fees for the airport, which generates all of its own revenue. Total revenue from all sources was about $147 million in the 2018 fiscal year.

Szczesniak said the plan is to issue a request for qualifications to potential developers in late spring and if the RFQ generates interest, a formal request for proposals, or RFP, could follow in late summer or fall.

“We want to make sure that we maximize the airport’s ability to attract business and it’s beneficial to the airport, too, because if we have the facilities that help cargo customers keep their planes full that keeps them at our airport,” Szczesniak said.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.